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5 Inverse ETFs That Gain in a Bear Market

$ProShares UltraPro Short QQQ ETF(SQQQ.US)$
The largest inverse ETF by assets under management at present is SQQQ, with roughly $4 billion in assets. It is linked to the Nasdaq-100 index of the largest stocks on this tech-heavy exchange – but keep in mind it is also a leveraged fund, meaning that instead of just moving the opposite direction of its benchmark, it moves even faster. Specifically, SQQQ is a 3X fund that is built to move three times in the opposite direction of the Nasdaq-100. This doesn't always line up with long-term performance, as its calculated on a daily basis, but year to date SQQQ is up about 60% as of this writing compared with a roughly 26% decline for the index it tracks.

$ProShares UltraPro Short S&P500 ETF(SPXU.US)$
The return of about 38% year to date in 2022 isn't quite three times the inverse of the S&P 500 benchmark's performance, but it's pretty darn close. As with the other ProShares offerings, this fund is well capitalized at present with just over $1 billion in total assets.

$ProShares UltraShort Bloomberg Crude Oil ETF(SCO.US)$
One of the most profitable trades in 2022 has been to rely on the surging energy market, via either Big Oil stocks or energy commodities like crude oil or natural gas. However, SCO has been gathering assets lately out of a fear that oil prices may have topped in 2022 and could be set for a rollback if demand wanes amid an economic slowdown. SCO is a 2X leveraged fund, meaning it moves twice as fast in the opposite direction of crude oil.

$Direxion Daily Semiconductor Bear 3x Shares ETF(SOXS.US)$
This is a 3X leveraged fund that aims to provide three times the opposite movement of a key basket of semiconductor manufacturers and chip-related tech stocks. This inverse ETF has risen 59% so far in 2022 thanks to supply chain disruptions and other challenges that are weighing heavily on chipmakers right now.

$Short Russell 2000 Proshares(RWM.US)$
This fund is tied to the Russell 2000 index of small-cap stocks.This is an index that calculates the top 3,000 companies in the U.S. stock market based on their market value and then cuts out the 1,000 largest firms. For investors who are looking to play the downside of a rough economic environment, smaller companies are sometimes a better bet because they are frequently undercapitalized and less mature than megacap blue-chip stocks. RWM is a roughly $500 million exchange-traded product based on current assets. It does not use leverage, so it is up 16% while the Russell 2000 is down about 19% year to date in 2022.
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